Tag: Tom Vilsack

The Iowa Policy Project has always enlisted the help of students and professors or former professors from Iowa colleges to help produce good research.

IPP founder and researcher David Osterberg, left, in his job as a professor of Public Health at the UI, has been part of the annual statement on climate change signed by researchers and teachers at all the colleges and universities in Iowa.

Farmers and land managers who have implemented proven conservation practices have positioned Iowa to lead implementation of Climate‐Smart Agriculture. Iowa’s leadership through wider adoption of conservation practices will benefit our state, while these practices lessen human contribution to net greenhouse gas emissions. …

We, as Iowa educators, believe Iowa should play a leadership role in this vital effort, just as our state has already done for wind energy.

The statement envisions “a multi‐faceted vision for land stewardship by vigorously implementing federal, state, and other conservation programs” to generate a more diverse landscape. It concludes:

Such a landscape would benefit all Iowans by transforming Iowa’s vast croplands into resources that simultaneously generate food, feed, fuel, a healthier climate, better soils, wildlife habitat, and cleaner waters.

The lead authors are Chris Anderson, who has served as assistant director of Iowa State University’s climate science program, and Jerry Schnoor, co-director of the UI Center for Global and Regional Environmental Research, with editorial assistance from senior science writer Connie Mutel of the UI.

The issues raised in this statement fit well with our work at the Iowa Policy Project. We produce papers on water quality and confined animal agriculture, and connect these issues to public policy impacts. What we do at this small policy institute fits into larger questions addressed by academics and policy people in the state.

The more small-business owners understand how big businesses compete unfairly and do not contribute their fair share of state taxes, the more pressure can build for real reform.

Small business owners get it: They follow the rules, but preferential treatment for giant companies puts them at a disadvantage.

Case in point: Lora Fraracci, who had an excellent guest opinion in today’s Cedar Rapids Gazette about practices big companies use to avoid paying U.S. taxes. The problem is not exclusively an issue with the lax U.S. tax code. It is a big problem at the state level as well.

Ms. Fraracci runs a residential and commercial cleaning business. As she noted:

“As a small-business owner in Des Moines, I play by the rules and pay my taxes to support our American economy. I create jobs that will continue to support our local economy. When the playing field is so uneven it makes it hard to realize this dream.”

The issue has been receiving some national attention, but many may not realize the prevalence of this problem and its extension to state taxes. While Ms. Fraracci and other small businesses, or Iowa focused businesses, follow the rules, large companies they may serve can find a way to either (1) avoid the rules, or (2) block stronger rules.

The Iowa Fiscal Partnership has written about these issues for some time, and the reports are on our website.

The biggest Iowa breaks come in two ways: tax loopholes and tax credits.

Tax loopholes have been estimated to cost the state between $60 million and $100 million a year. Loosely written law is an invitation to big companies’ lawyers and accountants to find ways to lower their firms’ taxes. Multistate firms can shift profits to tax-haven states and avoid taxes they otherwise would be paying in Iowa. That creates the uneven playing field Ms. Fraracci sees.

Iowa could fix this by adopting something called “combined reporting,” which the business lobby has fought tooth and nail when proposed in the past by Governors Tom Vilsack and Chet Culver. Many states — including almost all our neighbors (Illinois, Wisconsin, Minnesota, Kansas and Nebraska) — already do this. See our 2007 report, which remains relevant because Iowa has refused to act.

Tax credits are particularly costly, rarely reviewed with any sense that they will be reformed. This is illustrated best with the Research Activities Credit, which provides a refundable credit to big companies to do something they are likely to anyway: research to keep their businesses relevant and competitive.

Looking ahead, as a new legislative session approaches and we hear repeatedly that things are tight, keep these points in mind to better understand the real fiscal picture facing Iowa. The more small-business owners understand this, the more likely pressure can build for real reform.